ESAB India Limited has informed stock exchanges about receiving income tax penalty orders totaling ₹1.45 crores for assessment years 2017-18 and 2018-19. The company disclosed this development under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements on December 30, 2025.

Tax Penalty Orders Overview

The Income Tax Department issued two separate penalty orders under Section 270A of the Income Tax Act 1961, both received by the company on December 29, 2025, through electronic means via the IT portal. The orders relate to alleged underreporting of total income by the company for the respective assessment years.

Financial Impact Assessment

The penalty orders have resulted in significant financial implications for ESAB India Limited:

Income Reassessment Details

For assessment year 2017-18, the assessing officer reassessed the company's total income from ₹32,64,25,800 to ₹39,75,68,761, representing an increase of ₹7.11 crores. This reassessment led to penalty proceedings and the imposition of ₹1,23,10,580 as penalty.

Similarly, for assessment year 2018-19, the total income was reassessed from ₹46,77,97,740 to ₹48,03,12,831, showing an increase of ₹1.25 crores. The penalty imposed for this assessment year amounts to ₹21,86,636.

Company's Response Strategy

ESAB India Limited has indicated that it is in the process of preferring appeals before the appellate authority against both penalty orders. The company maintains its position and intends to challenge the reassessment and penalty imposition through the appropriate legal channels.

Regulatory Compliance

The disclosure has been made in compliance with SEBI Master Circular SEBI/HO/CFD/PoD2/CIR/P/0155 dated November 11, 2024, and SEBI Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/25 dated February 25, 2025. The company has declared that the information provided is true, correct, and complete to the best of its knowledge and belief, as required under Regulation 30(13) of SEBI LODR Regulations.

ESAB India Limited has announced a Board meeting scheduled for February 10, 2026, to consider the company's unaudited financial results for the third quarter of FY26. The meeting will focus on reviewing the financial performance for the quarter ended December 31, 2025. Additionally, the Board may consider recommending a second interim dividend for FY26.

Board Meeting Details

The key agenda items and timeline for the upcoming Board meeting are as follows:

Potential Dividend Consideration

The Board of Directors may consider recommending a second interim dividend for the financial year ending March 31, 2026, subject to the company's unaudited financial results. This decision will be based on the quarterly performance and overall financial position of the company for Q3FY26.

Trading Window Closure

In accordance with SEBI regulations and the company's internal code of conduct, ESAB India has implemented a trading window closure to prevent insider trading. The restrictions apply to all designated persons, including directors and employees.

Regulatory Compliance

The announcement has been made under Regulation 29(1)(a) & (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company has ensured compliance with insider trading regulations by notifying all designated persons about the trading restrictions during the specified period.

The unaudited financial results will be communicated to stakeholders within the prescribed timeline following the conclusion of the Board meeting, maintaining transparency and regulatory adherence.